Palantir Technologies continued its solid start to the week Tuesday, with the stock climbing for the second consecutive session after a couple of positive research notes from Wall Street firms.
Palantir stock was rising 1.9% to $159.01, having climbed 2% on Monday. After slumping for much of last month, shares are now a tick above where they began August.
The company’s profitable growth path and competitive advantage in turning data and artificial intelligence into solutions for customers haven’t gone anywhere, argued Mariana Pérez Mora of BofA Securities. The firm maintained a Buy rating and a $180 price target for the stock coming out of Palantir’s Artificial Intelligence Platform Conference, or AIPCon, on Monday.
Customers at AIPCon offered positive feedback about the company’s “Ontology” architecture, which allows them to connect data across their operations. Names like American Airlines Group, BP, and Novartis all vouched for the efficiencies Palantir’s platform has created, BofA noted.
“Many enterprises continue to struggle to realize a meaningful value add from the AI revolution,” Pérez Mora wrote. “Palantir customers continue to be an exception.”
Palantir’s ability to streamline operations for customers can translate into expansion among existing clients and an ability to grow even in a challenging macroeconomic environment, BofA argued.
Analysts at UBS have received similar feedback from customers, pointing to strong growth potential for Palantir’s government and commercial segments. CEO Alex Karp’s unofficial prediction that the company’s U.S. commercial business could grow tenfold in the next five years isn’t unrealistic, UBS analyst Karl Keirstead concluded in a research note.
“We remain very constructive on
Palantir’s fundamentals and conclude that the stock deserves a material premium to any other enterprise software stock,” Keirstead wrote. But that bullishness on the underlying business comes with a catch: Shares already trade at more than 200 times projected 12-month earnings.
UBS reiterated a Neutral rating for the stock and a price target of $165.
“We are comfortable loosening our normal valuation parameters for Palantir shares but would like to see the stock come in more before getting more constructive,” Keirstead said.
